CAVA Group (NYSE:CAVA) Trading 6.6% Higher - Still a Buy?

Key Points

• CAVA shares rose 6.6% in midday trading, reaching as high as $81.52, though volume was well below average.
• The company’s latest earnings beat expectations, with EPS of $0.20 versus $0.17 expected and revenue of $438.27 million, up 32.1% year over year.
• Wall Street remains broadly positive on the stock, with a consensus Moderate Buy rating and an average price target of $93.37, even as some insiders recently sold shares.

CAVA Group, Inc. (NYSE:CAVA - Get Free Report) shares rose 6.6% during mid-day trading on Wednesday . The company traded as high as $81.52 and last traded at $81.2940. Approximately 543,904 shares changed hands during trading, a decline of 84% from the average daily volume of 3,352,081 shares. The stock had previously closed at $76.28.

Wall Street Analyst Weigh In

CAVA has been the subject of a number of recent research reports. BMO Capital Markets set a $100.00 price target on shares of CAVA Group in a research report on Wednesday, May 20th. Northcoast Research raised shares of CAVA Group to a "strong sell" rating in a research note on Tuesday, April 21st. Citigroup upped their price objective on shares of CAVA Group from $75.00 to $92.00 and gave the company a "neutral" rating in a report on Monday, May 4th. DA Davidson raised their price target on shares of CAVA Group from $80.00 to $84.00 and gave the stock a "neutral" rating in a report on Thursday, May 21st. Finally, BNP Paribas Exane began coverage on shares of CAVA Group in a research report on Monday, March 30th. They issued a "neutral" rating and a $91.00 target price on the stock. One investment analyst has rated the stock with a Strong Buy rating, seventeen have issued a Buy rating, nine have assigned a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, the company presently has a consensus rating of "Moderate Buy" and a consensus target price of $93.37.

CAVA Group Price Performance

The company has a market capitalization of $9.44 billion, a PE ratio of 155.35, a price-to-earnings-growth ratio of 5.05 and a beta of 1.70. The company's 50 day simple moving average is $83.07 and its 200 day simple moving average is $72.21.

CAVA Group (NYSE:CAVA - Get Free Report) last announced its quarterly earnings results on Tuesday, May 19th. The company reported $0.20 EPS for the quarter, beating the consensus estimate of $0.17 by $0.03. The company had revenue of $438.27 million for the quarter, compared to analyst estimates of $360.89 million. CAVA Group had a net margin of 4.79% and a return on equity of 7.92%. The firm's revenue was up 32.1% on a year-over-year basis. During the same period in the prior year, the firm posted $0.22 earnings per share. On average, equities analysts forecast that CAVA Group, Inc. will post 0.55 EPS for the current year.

Insider Activity

In other news, CAO Adam David Phillips sold 5,181 shares of CAVA Group stock in a transaction on Thursday, May 21st. The shares were sold at an average price of $77.14, for a total value of $399,662.34. Following the transaction, the chief accounting officer directly owned 9,505 shares of the company's stock, valued at $733,215.70. The trade was a 35.28% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this link. Also, insider Kelly Costanza sold 10,010 shares of the firm's stock in a transaction dated Thursday, May 21st. The stock was sold at an average price of $79.87, for a total value of $799,498.70. Following the transaction, the insider directly owned 113,850 shares in the company, valued at approximately $9,093,199.50. This represents a 8.08% decrease in their position. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold 24,235 shares of company stock valued at $1,920,420 in the last ninety days. 6.70% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On CAVA Group

A number of hedge funds and other institutional investors have recently made changes to their positions in CAVA. Liontrust Investment Partners LLP purchased a new position in CAVA Group in the 3rd quarter valued at $43,189,000. Leibman Financial Services Inc. grew its position in CAVA Group by 162.9% in the 4th quarter. Leibman Financial Services Inc. now owns 67,324 shares of the company's stock valued at $3,951,000 after buying an additional 41,712 shares during the last quarter. Alliancebernstein L.P. grew its position in CAVA Group by 118.3% in the 3rd quarter. Alliancebernstein L.P. now owns 2,953,688 shares of the company's stock valued at $178,432,000 after buying an additional 1,600,630 shares during the last quarter. Envestnet Asset Management Inc. grew its position in CAVA Group by 57.7% in the 3rd quarter. Envestnet Asset Management Inc. now owns 222,499 shares of the company's stock valued at $13,441,000 after buying an additional 81,393 shares during the last quarter. Finally, Mitsubishi UFJ Asset Management Co. Ltd. boosted its position in shares of CAVA Group by 20.4% during the 3rd quarter. Mitsubishi UFJ Asset Management Co. Ltd. now owns 103,706 shares of the company's stock worth $6,265,000 after purchasing an additional 17,600 shares in the last quarter. Hedge funds and other institutional investors own 73.15% of the company's stock.

About CAVA Group

CAVA Group, Inc NYSE: CAVA is a leading fast-casual restaurant company specializing in Mediterranean-inspired cuisine. Operating under the CAVA brand, the company offers customizable bowls, pitas and salads built around a variety of proteins, grains, fresh vegetables and house-made spreads. With a focus on high-quality ingredients and made-to-order preparation, CAVA aims to deliver a casual yet elevated dining experience for dine-in, takeout and catering customers.

Founded in 2011 in the Washington, DC metro area by Ike Grigoropoulos, Dimitri Katsanis and Brett Schulman, CAVA has pursued an aggressive growth strategy that included the 2018 acquisition of Zoe's Kitchen.

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